Home and furniture prices rising, wages not keeping up

National

FILE – In this Friday, May 22, 2020, file photo, a sold sign sits in front of a house in Brighton, N.Y. The coronavirus pandemic helped shape the housing market by influencing everything from the direction of mortgage rates to the inventory of homes on the market to the types of homes in demand and the desired locations. (AP Photo/Ted Shaffrey, File)

TAMPA, Fla. (WFLA) — Income levels are on the rise but home and rent costs are rising along with it according to Realtor.com’s 2022 national housing forecast. The question is, will wage hikes match the continually inflating cost of renting or home buying?

The latest Consumer Price Index report from the U.S. Bureau of Labor Statistics reports furniture prices saw an increase of 11.8%. Bedroom furniture was up almost 10% and furniture for living rooms, kitchens and dining rooms was up 14.1%. All other furniture had a 9% increase. Nationally, the overall inflation rate was 6.8%.

In short, becoming a new homeowner will be more costly upfront just to secure a new place to live. Even after you buy your new home, filling it with what makes a house a home is also more expensive.

After a nearly 20% drop in available home inventory in 2021, Realtor.com is forecasting just a 0.3% increase in inventory for 2022. Comparatively, the Realtor.com study said August 2020 started a year-long series of double-digit increases in the cost of buying a home. Before that, the site said increases were 4% to 7% each year.

The “competitive seller’s market” for first-time buyers is likely to make demand surpass how much inventory will grow, pushing the price for home purchases higher, according to the forecast. While remote work becomes more common as a result of COVID-19 pandemic shifts, wages did not keep pace with price changes, according to the BLS.

Realtor.com’s forecast predicts “affordability will increasingly be a challenge as interest rates and prices rise” but the shift to more remote work may make it easier for younger buyers to purchase their homes.

For 2022, the site predicts a 6.6% home sales growth, and higher monthly payments for home buyers. The increase in home prices for 2022 accompanies a separate price increase for home furnishings.

All of these price increases come as higher wages to attract employees after record job separations and pandemic-fueled unemployment spell a potentially uncertain economic future next year.

Appliances for washing your clothes such as washers and dryers also saw price increases of 9.2%, while clocks, lamps, and decoration costs increased 4.2%.

Ways to bring nature inside where cities are dense and may prevent large gardens and yards also saw price increases. Indoor plants and flowers saw 6.4% price increases in the latest CPI, and nonelectric cookware like pots and pans, and tableware such as forks and knives, all got 5.7% more expensive.

Everything a homeowner needs to live got more costly, even the tools and hardware used in simple maintenance saw minimum increases of 6%. Housekeeping supplies were up less dramatically, with cleaning supplies up only 1% while household paper products like disposable napkins, paper towels and toilet paper only increased 2.6%.

The BLS reported that “from November 2020 to November 2021, real average hourly earnings decreased 1.6%, seasonally adjusted,” meaning wages decreased while the national inflation rate pushed costs for nearly all items on the market upward.

Dollars remained diminished despite efforts to attract new workers, with real earnings dropping 0.4% from October to November 2021. The BLS data showed what people were able to spend is lower compared to what everything costs.

Copyright 2022 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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